Airbus has proposed splitting Europe’s next-generation fighter project into two separate aircraft to break a long-running deadlock.
The idea would reshape the €100bn Future Combat Air System.
The dispute centres on leadership of the fighter element between Airbus’s defence arm and Dassault Aviation.
France wants a nuclear-capable jet, while Germany says it does not need one.
Chancellor Friedrich Merz described the disagreement as technical rather than political.
Airbus chief Guillaume Faury said the wider programme must not be put at risk.
He argued a two-fighter approach could allow new partners and preserve European defence cooperation.
France, Germany and Spain must soon decide whether to continue with the jet as planned.
Despite the uncertainty, Airbus said other FCAS elements, including drones and the combat cloud, are progressing.
Separately, the company reported a 23% rise in annual profit to €5.2bn.
However, supply shortages from engine maker Pratt & Whitney forced it to cut passenger-jet production targets.
January deliveries fell to their lowest level since 2020, allowing rival Boeing to narrow the gap.
